Luderus v. U. S. Helicopters, Inc.

Filing 17

MEMORANDUM Opinion and Order. Signed by the Honorable James B. Zagel on 2/25/2013. (ep, )

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
KIMBERLY LUDERUS
Plaintiff,
No. 12-CV-5094
Judge James B. Zagel

v.

U.S. HELICOPTERS, INC.
Defendant.

MEMORANDUM OPINION AND ORDER
Defendant has moved to dismiss Plaintiff’s one-count complaint for gender
discrimination, brought under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et
seq, for failure to state a claim and improper venue. For the following reasons, Defendant’s
motion is GRANTED in part and DENIED in part.
I.

FACTS

On June 26, 2012, Plaintiff filed a one-count complaint against her former employer, U.S.
Helicopters. The complaint alleged one count of gender discrimination under Title VII. In the
“STATEMENT OF FACTS” section, the complaint states:
12.
In June of 2010 and continuously thereafter, until August of 2010, plaintiff
while meeting the minimum standards of her employer, U.S. Helicopters willfully
discriminated against plaintiff because of her sex by treating her differently than
male employees by disparate treatment in discipline and job performance.
The complaint does not allege any facts to describe how Plaintiff was treated differently than
male employees, or to otherwise give Defendant notice of the specific conduct for which
Plaintiff seeks redress under Title VII.

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When Plaintiff began her employment with Defendant in March 2006, she signed an
employment agreement that contained the following forum selection clause:
[T]he parties specifically agree that in the event any controversy arises between
the parties concerning this Agreement, or whether any of the terms hereto have
been violated, that exclusive jurisdiction and venue to hear any such dispute is
conferred upon the appropriate division of the North Carolina General Court of
Justice sitting in and for Union County, North Carolina.
(Def. Ex. A at ¶ 12). Union County, North Carolina is Defendant’s principal place of business.
II.

ANALYSIS

Defendant moves to dismiss the complaint on the grounds that Plaintiff has failed to state
a claim upon which relief can be granted, Rule 12(b)(6), and improper venue, Rule 12(b)(3). I
address both arguments in turn.
A.

12(b)(6)

Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a “short and plain
statement of the claim showing that the pleader is entitled to relief.” While Rule 8 does not
require “detailed factual allegations,” it “demands more than an unadorned, the-defendantunlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal
quotation omitted). Thus, to survive a motion to dismiss, a complaint “must contain sufficient
factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Zellner v.
Herrick, 639 F.3d 371, 378 (7th Cir. 2011) (quoting Iqbal, 556 U.S. at 678). “A claim has facial
plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.” Id.
A professor of civil procedure looking to demonstrate to first-year law students the type
of conclusory, fact devoid allegations that cannot survive 12(b)(6) challenges post
Twombly/Iqbal, would be hard-pressed to find a better example than this complaint. Plaintiff

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does not allege a single fact from which this Court can plausibly infer that she is entitled to
relief. The Complaint contains nothing more than “abstract recitations of the elements of a cause
of action,” Brooks v. Ross, 578 F.3d 574, 581 (7th Cir. 2009), and as such it cannot survive the
12(b)(6) challenge.
Plaintiff’s argument that the “facial plausibility” standard applies only “when cases are
especially complex or where pretrial discovery would be especially burdensome to a defendant if
pleading standards were not heightened,” is so frivolous as to be sanctionable under Rule 11.
See Id. (“[Iqbal] clarified that Twombly’s plausibility requirement applies across the board, not
just to antitrust cases.”).
This is not to say that Rule 8 requires Plaintiff to plead a prima facie case, or allege facts
that go to every element of the claim. The prima facie showing is a summary judgment hurdle
that tests whether, post-discovery, a reasonable jury could find that adequate evidence has been
put forth to meet every claim element. That is to say, the prima facie showing is an evidentiary
standard, not a pleading requirement. Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002).
To satisfy Rule 8 pleading requirements, the Plaintiff must only allege sufficient facts for the
court to plausibly infer that, when the time comes, Plaintiff will be able to put forth the necessary
evidence.
Defendant’s Rule 12(b)(6) motion to dismiss for failure to state a claim is GRANTED.
B.

12(b)(3)

Defendant next moves to dismiss for improper venue based on the forum selection clause
contained in its employment agreement with Plaintiff. A forum selection clause is presumptively
valid and enforceable unless “(1) its incorporation into the contracts was the result of fraud,
undue influence, or overweening bargaining power; (2) the selected forum is so gravely difficult

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and inconvenient that [the complaining party] will for all practical purposes be deprived of its
day in court; or (3) [its] enforcement . . . would contravene a strong public policy of the forum in
which the suit is brought, declared by statute or judicial decision.” AAR Intern, Inc. v. Nimelias
Enterprises S.A., 250 F.3d 510, 525 (7th Cir. 2001) (citation and internal quotation marks
omitted).
Plaintiff argues that her statutory antidiscrimination claim falls outside the scope of the
forum selection clause, which she believes applies only to contractual disputes. Even if the
forum selection clause encompasses her statutory claim, she argues that Title VII’s special venue
provision, 42 U.S.C. § 2000e-5(f)(3), overrides it as a matter of public policy.
I begin with the latter argument. Title VII’s special venue provision provides:
Each United States district court and each United States court of a place subject to
the jurisdiction of the United States shall have jurisdiction of actions brought
under this subchapter. Such an action may be brought in any judicial district in the
State in which the unlawful employment practice is alleged to have been
committed, in the judicial district in which the employment records relevant to
such practice are maintained and administered, or in the judicial district in which
the aggrieved person would have worked but for the alleged unlawful
employment practice, but if the respondent is not found within any such district,
such an action may be brought within the judicial district in which the respondent
has his principal office. For purposes of section 1404 and 1406 of Title 28, the
judicial district in which the respondent has his principal office shall in all cases
be considered a district in which the action might have been brought.
42 U.S.C. § 2000e-5(f)(3).
Some district courts have refused to apply forum-selection clauses to Title VII
claims on the grounds that doing so would contravene important public policy interests
reflected in Title VII’s special venue provision—namely, reducing obstacles for
aggrieved parties seeking to enforce their civil rights. See, e.g., Smith v. Kyphon Inc.,
578 F.Supp.2d 954, 959-61 (M.D. Tenn. Sep. 22, 2008); Thomas v. Rehab. Services of
Columbus Inc., 45 F.Supp.2d 1375, 1379-81 (M.D. Ga. Mar. 19, 1999). Other district
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courts have declined to categorically invalidate private forum selection clauses in Title
VII cases, and instead have treated the special venue provision as one factor to be
weighed in the traditional venue analysis. See, e.g., Chapman v. Dell Inc., No. 09-C7,
2009 WL 1024635, at *3 (W.D. Tex. Apr, 15, 2009); Tuoni v. Elec. Evidence Discovery
Inc., No. 10-C2235, 2010 WL 5441656, at *4 (D.N.J. Dec. 23, 2010). Neither the
Supreme Court nor the Seventh Circuit has directly addressed whether, or to what extent,
private forum selection clauses are enforceable in the context of Title VII actions.
To determine the enforceability of the forum selection clause at issue in this case,
I first consider whether Title VII’s special venue provision reflects “a strong public
policy . . . declared by statute.” AAR Intern, 250 F.3d at 525. While no public policy
interest is explicitly mentioned in the text of the special venue provision, such an interest
is discernible by comparing the special venue provision to the general venue provision
for civil actions, 28 U.S.C. § 1391, and by weighing the special venue provision’s role in
Title VII’s overall enforcement regime.
28 U.S.C. § 1391 is the general venue provision for civil actions brought in
federal court. It provides, in pertinent part:
(b) Venue in general. –A civil action may be brought in—
(1) a judicial district in which any defendant resides, if all defendants are
residents of the State in which the district is located;
(2) a judicial district in which a substantial part of the events or omissions
giving rise to the claim occurred, or a substantial part of property that is the
subject of the action is situated;
(3) if there is no district in which an action may otherwise be brought as
provided in this section, any judicial district in which any defendant is subject to
the court’s personal jurisdiction with respect to such action.
28 U.S.C. § 1391(b).
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While § 1391(b)(1) reflects an obvious Congressional desire to avoid
inconvenience to defendants, Title VII’s special venue provision reflects the opposite
concern. Under 42 U.S.C. § § 2000e-5(f)(3), venue is considered proper in the judicial
district in which the defendant maintains his principal office (presumably the most
convenient forum for the defendant) only if the defendant is not found in 1) the state in
which the alleged discrimination occurred; 2) the judicial district in which relevant
employment records are kept; or 3) the judicial district in which the Plaintiff would have
worked but for the alleged discriminatory practice—all districts that are presumably more
convenient for the plaintiff. Id. The most plausible interpretation of Congress’s choice
to make the defendant’s principal place of business the venue of last resort is that it was
concerned “that national companies with distant offices might try to force plaintiffs to
litigate far from their homes,” and thereby chill private enforcement of civil rights by
making private suits cost prohibitive. Passantino v. Johnson & Johnson Consumer
Products, Inc., 212 F.3d 493, 506 (9th Cir. 2000).
That Congress would be concerned with employer attempts to raise the costs of
litigating Title VII claims is not surprising. In crafting Title VII, Congress entrusted
private party litigants to serve as the primary regulators of employment discrimination in
this country. J. Maria Glover, The Structural Role of Private Enforcement Mechanisms
in Public Law, 53 Wm. & Mary L. Rev. 1148-50. Indeed, in the past ten years, 98
percent of job discrimination suits were brought by private parties, while only two
percent were prosecuted by the federal government. Id. at 1149-50 (citing SEAN
FARHANG, THE LITIGATION STATE 3 (2011)). Forum selection clauses that require
plaintiffs to litigate in distant forums therefore threaten to significantly undermine Title
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VII’s primary enforcement mechanism.1
Based on the above, I conclude that Title VII’s special venue provision is an
embodiment of Congress’s desire to encourage broad private regulation of employment
discrimination. The venue provision plays a direct role in facilitating this private
regulation by affording plaintiffs a broad range of alternative venues, which lowers the
cost of bringing suit. The special venue provision also reflects a public policy interest in
having Title VII cases litigated in the forums most affected by the alleged discrimination.
Only as a last resort did Congress think Title VII suits were properly brought in the
judicial district in which the defendant has “his principal office”—and this because
litigating in the forum of the principal place of business might raise the costs of bringing
suit for plaintiffs, and because that forum is often not as directly concerned with the
discriminatory conduct.
Defendant points out that the Supreme Court has upheld employment contracts
requiring arbitration of statutory antidiscrimination claims. See, e.g., 14 Penn Plaza LLC
v. Pyett, 556 U.S. 247 (2009). In upholding these arbitration clauses, the Court has
stated, “[b]y agreeing to arbitrate a statutory claim, a party does not forgo the substantive
rights afforded by the statute; it only submits to their resolution in an arbitral, rather than
a judicial, forum.” Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26 (1991)
(quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628
(1985)). Thus, by analogy, Defendant argues that the forum selection clause in this case
is enforceable because it does not require Plaintiff to forego her substantive rights under

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Title VII’s special venue provision is complemented by other liberal enforcement provisions that evidence
Congress’s desire to lower the costs of suit for private litigants. Chief among these is the attorney’s fee-shifting
provision, 42 U.S.C. § 2000e-5(k). See also Piper Hoffman, How Many Plaintiffs Are Enough? Venue in Title VII
Class Actions, 42 U. Mich. J. L. Reform 843, 851-852 (2009).

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Title VII, but merely restricts her choice of forum.
I disagree. Forum selection clauses differ from arbitration agreements in several
substantive ways, and these differences undermine Defendant’s argument that the
enforceability of one necessitates the enforceability of the other in the context of statutory
antidiscrimination claims. First, in passing the Federal Arbitration Act (“FAA”), 9
U.S.C. § 1 et seq., Congress expressed “a liberal federal policy favoring arbitration
agreements.” Gilmer, 500 U.S. at 25. In light of this clear Congressional policy
preference, the Supreme Court has treated all statutory claims as presumptively subject to
arbitration “unless Congress itself has evinced an intention to preclude a waiver of
judicial remedies for the statutory rights at issue.” Id. at 26. But Congress has expressed
no such favoritism toward forum selection clauses. Since the Supreme Court decided
M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972), federal courts have widely
enforced reasonable forum selection clauses, but that is based on traditional contract
principles of holding parties to their own agreement, not on a clear policy preference
expressed by the national legislature. Thus, the absence of a clear Congressional
intention to preclude waiver of Title VII’s special forum selection clause should not be
afforded the same presumptive weight as in the arbitration context.
Second, the Supreme Court has required that agreements to arbitrate statutory
antidiscrimination claims be “explicitly stated” in “clear and unmistakable” terms before
an employee will be deemed to have waived her right to redress in court. Wright v.
Universal Maritime Service Corp., 525 U.S. 70, 79-80 (1998); see also 14 Penn Plaza,
556 U.S. at 260-262 (explaining its ruling in Alexander v. Gardner-Denver Co., 415 U.S.
36 (1974)). The employment agreement in this case does not make explicit that the

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forum selection clause pertains to statutory claims in addition to purely contractual
disputes. Thus, if I apply the arbitration analogy as Defendant urges, Plaintiff’s Title VII
claim falls outside the scope of the forum selection clause (which Plaintiff also argues).
Third, arbitration lowers the cost of dispute resolution for all parties. See Circuit
City Stores, Inc. v. Adams, 532 U.S. 105, 123 (2001) (“Arbitration agreements allow
parties to avoid the costs of litigation, a benefit that may be of particular importance in
employment litigation, which often involves smaller sums of money than disputes
concerning commercial contracts.”). Thus, the enforcement of employment agreements
to arbitrate statutory discrimination claims does not pose the same cost-prohibitive,
enforcement-chilling effect as do forum selection clauses that require plaintiffs to litigate
statutory claims in far off districts. Based on the above, I reject Defendant’s attempt to
analogize the enforceability of forum selection clauses with arbitration agreements.
I conclude that forum selection clauses contained in employment agreements are
unenforceable insofar as they preclude plaintiffs from filing Title VII claims in any of
Congress’s three preferred forums under 42 U.S.C. § 2000e-5(f)(3)—the state in which
the alleged discrimination took place, the judicial district in which relevant employment
records are kept, or the judicial district in which the aggrieved party would have worked
but for the unlawful practice.
Defendant’s Rule 12(b)(3) motion to dismiss for improper venue is DENIED.
III.

CONCLUSION

For the foregoing reasons, the Complaint is DISMISSED without prejudice. Plaintiff is
granted leave to amend pursuant to Rule 15(a). See Crestview Village Apartments v. U.S. Dept.
of Housing and Urban Development, 383 F.3d 552, 557-558 (7th Cir. 2004).

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ENTER:

James B. Zagel
United States District Judge

DATE: February 25, 2013

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